Explain the effect that a reference to other agreements has on negotiable instruments and the difference between a mere reference and a negotiable instrument's being subject to the terms of another agreement

A reference to the mere existence of another agreement does not affect negotiability because it merely describes the consideration and transaction giving rise to the instrument. However, if a right to payment is made "subject to" the terms of another agreement, the instrument is not negotiable. This restriction against making an instrument subject to another agreement is to enable any person to determine the right to payment provided by the instrument without having to look beyond its four corners.